2004-25466 Reso Inc.RESOLUTION NO. 2004-25466
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING
AN AMENDMENT TO THE AGREEMENT WITH CAMP,
DRESSER AND MCKEE (CDM) TO PROVIDE
ENGINEERING SERVICES FOR UPGRADING WATER AND
SEWER PUMPING STATIONS; SAID AMENDMENT
PROVIDING FOR CONSTRUCTION ADMINISTRATION AND
FIELD OVERSIGHT SERVICES FOR THE WATER AND
WASTE WATER PUMP STATIONS UPGRADES PROJECT
IN AN AMOUNT NOT TO EXCEED $500,000.
WHEREAS, on July 8, 1992, the Mayor and City Commission approved Resolution
No. 92-20540, authorizing the Mayor and City Clerk to execute an Agreement between the
City and Camp, Dresser and McKee, Inc. (CDM) to provide engineering services for
upgrading sewer and water pumping stations (Agreement); and
WHEREAS, because of CDM's familiarity and expertise with the City's sanitary
sewer system, the City has, in past years, amended the Agreement to provide additional
professional engineering services to the City; and
WHEREAS, CDM has served as the engineering consultant on the Water and
Wastewater Pump Stations Upgrade Project (Project); and
WHEREAS, on February 1999, Resolution No. 99-23061, awarded a
$17,692,568.00 contract to Felix Equities, Inc. (FEI), pursuant to Bid No. 99-97/98, for the
Project; and
WHEREAS, since the commencement of construction, several delays related to
coordination of unforeseen conditions, omissions and deletions occurred; and
WHEREAS, due to many issues with the performance of FEI on the project, on July
10, 2002, and pursuant to Article 8.8 of the City's contract with FEI, the Administration
recommended that the City Commission remove the prosecution of work from FEI and
authorize the City Manager, or his designee, to prosecute the remainder of the work; and
WHEREAS, the City Commission approved this request on that date, through
Resolution No. 2002-24924; and
WHEREAS, Resolution No. 2002-24924, also declared an emergency situation and
waived formal competitive bidding requirements for the Project, providing the City Manager
the necessary tools to procure a replacement contractor, who could successfully complete
the Project; and
WHEREAS, on June 10, 2003, the deadline for bids pursuant to a modified bid
process for a replacement contractor, bids were received by the City's Procurement
Division; and
WHEREAS, only one contractor was deemed qualified and responsive, and the City
decided to proceed with negotiations with Widell, Inc, whose initial bid was in the amount of
$20,970,000; and
WHEREAS, the City entered into long and very detailed negotiations with Widell,
wherein ClP staff and CDM, as well as personnel from Widell, evaluated every item in the
bid proposal; reviewed carefully the established scope; and reviewed the documents
submitted for bid, etc.; in the end, the parties have agreed upon a final cost to complete the
Project of $17,352,615; and
WHEREAS, work will include furnishing and installing all necessary materials,
equipment, supplies and associated work including labor, excavation, etc. to complete the
major renovation of twelve (12) dry pit waste water pump stations; four (4) water pump
stations; six (6) electrical/generator buildings; a new system-wide process instrumentation
and control system; and the replacement of eleven (11) submersible waste water pump
stations; and
WHEREAS, additional services for CDM to perform construction administration and
Field Oversight services are needed for the completion of the Project; and
WHEREAS, the Administration recommends an amendment to the Agreement with
CDM, for the additional services, in an amount not to exceed $500,000; and
WHEREAS, not withstanding the aforestated, the proposal the City received from
CDM is higher than this amount, but the City and CDM have not yet begun negotiations
regarding the scope and amount of the fee; and
WHEREAS, if the City cannot negotiate a fee of $500,000 or less, an item may be
brought to the City Commission at a later date for additional funds; and
WHEREAS, by amending the Agreement amount now, continuity of services is
guaranteed so construction can begin without having fully negotiated the final amount.
NOW, THEREFORE BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission approve an Amendment to the Agreement with Camp, Dresser and McKee
(CDM) to provide engineering services for upgrading water and sewer pumping stations;
said Amendment providing for construction administration and field oversight services for
the Water and Waste Water Pump Stations Upgrades Project, in an amount not to exceed
$500,000.
PASSED AND ADOPTED this ' .14~:h da ~y, 2004.
Cl'I'Y'(~LERK
T:~AGENDA~2004~Jan1404\Regular~Pump Stations Upgrades Reso - CDMdoc
APPROVED A~ TO
FORM & LANGUAGE
& FOR EXECUTION
or
Condensed Title:
COMMISSION ITEM SUMMARY
Award the contract to Widell Inc. for re-procurement of Water and Waste Water Pump Stations Upgrades in the Amount of
$17,352,615; authorize additional services to CDM for related Construction Administration services; and further re-affirming
all previous authority granted by the City Commission to the City Manager, or designee, in taking appropriate actions
regarding administration of both the Felix Equities, Inc. and United States Fidelity and Guaranty Company contracts with the
city.
Issue:
Should the City Commission Award the Contract to Widell, Inc. and Additional Services to CDM?
Item Summary/Recommendation:
On February 1999, Resolution 99-23061 awarded a $17,692,568.00 contract to Felix Equities, Inc. (FEI) pursuant to
Invitation to Bid No. 99-97/98 for the Water and Waste Water Pump Station Upgrades. On June 18, 2002, the Administration
certified FEI in Default. On July 10, 2002, the Mayor and City Commission adopted Resolution 2002-24924, which declared
an emergency situation and waived the formal competitive bidding requirements for the project. Linc Net, the parent
company of FEI, filed for bankruptcy and an automatic stay was placed on the FEI contract. This action precluded the City
from implementing any action regarding FEI and FEl's contract without Bankruptcy Court approval. At approximately the
same time, FEI and its surety company, United States Fidelity and Guaranty Company (USF&G), requested a meeting with
the City to discuss potential settlement options. These initial discussions did not produce a settlement that met the interests
of all parties. Therefore, the City invoked the Performance Bond on the project provided by USF&G in August 2002. USF&G
declined to honor its Performance Bond based on the bankruptcy of FEI. Subsequent demands and settlement discussions
continued throughout the balance of 2002 and into 2003. To date, the City Administration and City Attorney have been
unable to negotiate an acceptable settlement and many of these issues have become a source of current litigation. Dueto
the continued deterioration of the pump stations, the City Administration decided in late 2002 that it was not in the City's
interest to continue to wait for the conclusion of the FEI/Surety issues noted above before continuing the project. Therefore,
the Administration decided to complete the previously approved informal bid process to secure a replacement contractor.
The CIP Office, together with the Procurement Department, conducted a selective re-bid for the project in 2003 with a
deadline of June 10, 2003, to receive bid proposals for the re-procurement. Widell, Inc. was the only respondent deemed
qualified and responsive and presented an initial bid proposal in the amount of $20,970,000, which was later negotiated,
with the assistance of Camp Dresser and McKee, the City's consultant on the project, and which resulted in a final bid
proposal in the amount of $17,352,615. The work includes the completion of a major renovation to twelve (12) dry pit waste
water pump stations, four (4) water pump stations, six (6) electrical/generator Buildings, a new system-wide process
instrumentation and control system, and the replacement of eleven (11 ) submersible waste water pump stations. At this time
the conditions of some of the Pump Stations are in emergency status; the equipment installations that FEI was providing was
never completed and the Pump Stations are still working with extremely outdated and damaged equipment installed almost
30 years ago.
Advisory Board Recommendation:
I N/A
Financial Information:
[
,
Finance Dept. Total
City Clerk's Office Legislative Tracking:
I JECh
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 · ~
www.miamibeachfl.gov
To:
From:
SubJect:
COMMISSION MEMORANDUM
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez
City Manager
Water and Waste Water Pump Stations Upgrades Project,
Date: January 14, 2004
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING THE AWARD OF A
CONTRACT TO THE FIRM OF WIDELL, INC., IN THE AMOUNT OF
$17,352,615, FOR COMPLETION OF THE WATER AND WASTE WATER
PUMP STATION UPGRADES PROJECT (BID NO. 99-97198), PURSUANT
TO THE ACTION(S) DELEGATED TO THE CITY MANAGER AND/OR HIS
DESIGNEE PURSUANT TO RESOLUTION NO. 2002-24924; AND
FURTHER RATIFYING RESOLUTION NO. 2002-24924, AND HEREIN
REAFFIRMING THE ACTIONS TAKEN BY THE CITY MANAGER AND/OR
HIS DESIGNEE PURSUANT THERETO AS PROPERLY WITHIN THE CITY
MANAGER'S AUTHORITY, AS DELEGATED PURSUANT SAID
RESOLUTION NO. 2002-24924, INCLUDING BUT NOT LIMITED TO
SUBSEQUENT ACTIONS TAKEN REGARDING THE CITY'S CONTRACT
WITH FEI AND THE SURETY, UNITED STATES FIDELITY AND
GUARANTY COMPANY, INCLUDING, BUT NOT LIMITED TO DEFAULT
ACTIONS; INVOKING OF PERFORMANCE BONDS; SELECTION OF THE
REPLACEMENT CONTRACTOR, WlDELL, INC.; AND ANY OTHER
SIMILAR OR RELATED ACTIONS.
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA APPROVING AN AMENDMENT TO THE
AGREEMENT WITH CAMP, DRESSER AND MCKEE (CDM) TO PROVIDE
ENGINEERING SERVICES FOR UPGRADING WATER AND SEWER
PUMPING STATIONS; SAID AMENDMENT PROVIDING FOR
CONSTRUCTION ADMINISTRATION AND FIELD OVERSIGHT SERVICES
FOR THE WATER AND WASTE WATER PUMP STATIONS UPGRADES
PROJECT IN AN AMOUNT NOT TO EXCEED $500,000.
ADMINISTRATION RECOMMENDATION
Adopt the Resolutions.
FUNDING
Funding has been appropriated and is available from the existing Standing Order for Felix
Equities, Inc. (FEI), in the amount of $11,107,245.95. Additional funds from Water &
City Commission Memorandum
Water and Wastewater Pump Station Upgrade Contractor Re-Procurement
January 14, 2004
Page 2 of 6
Sewer Bond - Series I (Fund 426) allocated to the Water and Wastewater Pump Station
Upgrades Project in the amount of $2,552,647.88 have also previously been appropriated
and are available for use on the project.
Funding in the amount of $4,862,562.00 has been appropriated for use on the South
Pointe Wastewater Master Booster Pump Station project, which is in the design phase.
With the approval of this item, this funding will be reallocated to the Water and Wastewater
Pump Station Upgrades Project. The South Pointe Wastewater Master Booster Pump
Station project will be funded by South Pointe Redevelopment Agency (RDA) Tax
Increment Funds (TIF).
Additional funding in the amounts of $1,203,063.00 and $15,893.71 are available from the
City Center and South Pointe RDA TI F and are being appropriated through the adoption of
a resolution of the Redevelopment Agency elsewhere on this agenda.
The sum of these amounts, $19,741,412.54, will fully fund the Construction contract with
Widell ($17,352,615.00), Additional Services for Construction Administration and Field
Observation for CDM (not to exceed $500,000.00), additional CIP Office project
management fees ($158,455.11 ), and a project contingency ($1,730,342.43).
ANALYSIS
On February 1999, Resolution 99-23061 awarded a $17,692,568.00 contract to Felix
Equities, Inc. (FEI) pursuant to Bid No.99-97/98 for the Water and Waste Water Pump
Station Upgrades in the City of Miami Beach.
Since the commencement of construction, several delays related to coordination of
unforeseen conditions, omissions and deletions occurred.
On May 21, 2001, the Contractor (FEI) submitted a Request for Equitable Adjustment
(REA) to the City's consulting engineer Camp Dresser & McKee, Inc. (CDM) for
approximately $1.7 million, representing increased costs the Contractor attributed to delays
associated with the issues referenced above. Repeated City requests for FEI to submit
specific documentation to support the REA were not provided in sufficient detail to allow a
thorough analysis by CDM or City staff. Without this information, the City could not
evaluate the Contractor's REA.
On November 28, 2001, as a result of staff concems, a Letter to Commission (LTC) was
provided to the City Commission advising that the conditions described above had
contributed to time delays and additional costs.
The City's Project team actively addressed alternatives to encourage FEI to proceed with
construction without further delays, including discussions to set out a plan to resolve
outstanding claims issues, and to persuade FEI to immediately bring the major
subcontractors back to work, produce a realistic recovery schedule to advance the project's
City Commission Memorandum
Water and Wastewater Pump Station Upgrade Contractor Re-Procurement
January 14, 2004
Page 3 of 6
critical path, and to provide sufficient skilled labor and equipment to prosecute the work in a
timely manner. The City Administration, as a measure of good faith, did offer additional
time and money to resolve the outstanding REA for those areas that it felt could be
supported by the information it had. Unfortunately, these discussions did not yield positive
results.
For several months FEI continued to fall seriously behind schedule and did not appear to
have a plan of action to correct the situation. The ever-dwindling level of manpower
assigned to the project mirrored the lack of progress. Several of FEI's subcontractors on
the project notified the City of FEI's failure to pay them and that they had therefore stopped
work and/or refused to provide FEI with release of lien letters.
In this phase of the contract the critical path ran through the electrical and mechanical
subcontractors. The electrical subcontractor for several months severely reduced the
number of their employees on site to well below what was needed to make effective
progress. The mechanical contractor apparently left the project entirely. Both the electrical
and mechanical subcontractors indicated that their lack of responsiveness on the project
was due to non-payment by FEI. Because of the lack of progress of the two major
subcontractors the critical path did not advance for nearly four months. At that manpower
level, extensive additional delays were anticipated which contributed to inexcusable delays
in the contract time. The lack of adequate manpower to advance the project resulted in the
effective abandonment of the project by FEI.
FEI did, however, file a second Request for Equitable Adjustment in the amount of $1.4
million in May 2002. The second REA brought the total REA claim by FEI to $3.1 million.
Similar to the first REA, this second REA did not include sufficient detail to support the
Contractor's request for additional dollars.
As FEI continued in its failure to properly staff the job, the City Administration, on June 7,
2002, sent Felix Equities a Notice of Default due to the lack of progress in the project and
provided FEI 10 days to correct the lack of progress issues. Upon FEI's failure to propedy
remedy its lack of progress, the City Administration certified FEI in default on June 18,
2002. Subsequently, on July 10, 2002, and pursuant to Article 8.8 of the City's contract
with FEI, the Administration recommended that the City Commission remove the
prosecution of work from the hands of FEI and authorize the City Manager, or designee, to
prosecute the remainder of the work. Pursuant to Article 8.8, any remaining funds in the
contract would be returned to the contractor, or if the remaining funds are insufficient, the
contractor, after completion of the work, would be required to pay the City the cost overrun.
This action was consistent with the contract requirements. The City Commission approved
this request on that date through Resolution 2002-24924.
Resolution 2002-24924 declared an emergency situation and waived formal competitive
bidding requirements for the project, providing the City Manager the necessary tools to
procure a new Contractor which could successfully complete the project. Although, for the
above reasons, the Administration recommended a waiver of competitive bid requirements,
the Administration did follow a modified bid process in choosing a replacement contractor.
City Commission Memorandum
Water and Wastewater Pump Station Upgrade Contractor Re-Procurement
January 14, 2004
Page 4 of 6
The City requested proposals from three replacement contractors, some who had done
business with the City previously and some who were recommended by the designer as
providing superior work on previous projects. The emphasis on the selection of a
replacement contractor was on qualifications. The Citywanted to contract with a contractor
who specializes in this type of work and one that could demonstrate a track record of
success. It was also preferable to have a contractor that has stepped in and completed
contracts as a replacement contractor in the past.
On July 9, 2002, the day before the City Commission action noted above, Linc Net, the
parent company of FEI, filed for bankruptcy and an automatic stay was placed on the FEI
contract. This action precluded the City from implementing any action regarding FEI and
FEI's contract without Bankruptcy Court approval. At approximately the same time, FEI
and its surety company, United States Fidelity and Guaranty Company (USF&G),
requested a meeting with the City to discuss potential settlement options. These initial
discussions did not produce a settlement that met the interests of all parties. Therefore,
the City invoked the Performance Bond on the project provided by USF&G in August 2002.
USF&G declined to honor its Performance Bond based on the bankruptcy of FEI.
Subsequent demands and settlement discussions continued throughout the balance of
2002 and into 2003.
To date, the City Administration and City Attorney have been unable to negotiate an
acceptable settlement and many of these issues have become a source of current
litigation. As a side note, and due to one of the issues raised by FEI and USF&G, the
Commission Resolution accompanying this Commission Memo requests that the City
Commission re-affirm that the City Manager and/or designee had authority to act regarding
all provisions of the City's contracts with both entities, including default actions, invoking of
performance bonds, and any similar or related actions.
Due to the continued deterioration of the pump stations, the City Administration decided in
late 2002 that it was not in the City's interest to continue to wait for the conclusion of the
FEI/Surety issues noted above before continuing the project. Therefore, the Administration
decided to complete the previously approved informal bid process to secure a replacement
contractor.
On June 10th, 2003, the deadline for bids pursuant to Invitation to Bid No. 10-02/03, were
received at the Procurement Department. Only one contractor, who was deemed qualified
and responsive, submitted an initial bid proposal and the City decided to proceed with
negotiations. The initial bid by Widell, Inc. was in the amount of $20,970,000.
The City entered into long and very detailed negotiations with Widell. CIP staff and CDM
as well as personnel from Widell evaluated every item in the bid proposal, reviewed
carefully the established scope, and reviewed the documents submitted for bid, etc., and in
the end agreed upon a final cost to complete the project of $17,352,615. Work will include
furnishing and installing all necessary materials, equipment, supplies and associated work
including labor, excavation, etc. to complete the major renovation of twelve (12)dry pit
waste water pump stations, four (4) water pump stations, six (6) electrical/generator
City Commission Memorandum
Water and Wastewater Pump Station Upgrade Contractor Re-Procurement
January 14, 2004
Page 5 of 6
buildings, a new system-wide process instrumentation and control system, and the
replacement of eleven (11 ) submersible waste water pump stations.
The City and CDM feel that Widell's price is reasonable at this time. Not only has the price
gone up since 1999 when the project was originally bid, due to time and escalation, but
also that original price from FEI has now been determined to be, by the Program Manager
and the City, most probably lower than what it should have been at that time. The original
Engineer's estimate of probable cost was $20,992,900, but after discussions with FEI and
evaluation of FEI's qualifications and references, they assured the City and CDM that their
price was accurate and that they could perform the work for the amount quoted. Based on
FEI's ultimate financial disposition, this assertion by FEI appears to have been proven
wrong.
There will also be additional services for CDM to complete the Construction Administration
and Field Oversight, in an estimated amount of $500,000. The proposal the City received
from CDM is higher than this amount, but the City and CDM have not yet begun
negotiations regarding the scope and amount of the fee. If the City cannot negotiate a fee
of $500,000 or less, an item may be brought to the Commission at a later date for
additional funds. By amending the contract amount now, continuity of services is
guaranteed so construction can begin without having fully negotiated the final amount.
Similarly, the City must provide a new contingency on the project, in the amount of
$1,730,342.43. Finally, there will be additional project management fees for the ClP Office
in the amount of $158,455.11. A total of $19,741,412.54 is needed to complete the
project.
Item Amount
Widel Negotiated Bid Amount
Contingency for Project
Construction Administration and Field Oversight
ClP Office Management Fees
$17,352,615.00
1,730,342.43
500,000.00
158,455.11
Total Project Costs $19,741,412.54
The original contract value with FEI was $17,692,568.00. Payments were made to FEI for
the work performed prior to the abandonment of the project. The City had to maintain the
project site and materials once FEI was removed from the project until a new contractor
could assume responsibility for the site and materials. A balance of $11,107,245.95
remains from the original FEI contract value for use to procure a new contractor.
Additional funds from Water & Sewer Bond - Series I (Fund 426) allocated to the Water
and Wastewater Pump Station Upgrades Project in the amount of $2,552,647.88 have also
previously been appropriated and are available for use on the project.
City Commission Memorandum
Water and Wastewater Pump Station Upgrade Contractor Re-Procurement
January 14, 2004
Page 6 of 6
Funding in the amount of $4,862,562.00 from the Water & Sewer Bond - Sedes I (Fund
426) has been appropriated for use on the South Pointe Wastewater Master Booster Pump
Station project, which is in the design phase. With the approval of this item, this funding
will be reallocated to the Water and Wastewater Pump Station Upgrades Project. The
South Pointe Wastewater Master Booster Pump Station project will be funded by South
Pointe Redevelopment Agency (RDA) Tax Increment Funds (TIF).
Additional funding in the amounts of $1,173,063.00 and $15,393.71 are available from the
City Center and South Pointe RDA TIF and are being appropriated through the adoption of
a resolution of the Redevelopment Agency elsewhere on this agenda. The following table
demonstrates the funds being recommended for use to fully fund this project.
Funding Source
Balance from FEI Contract
Water & Sewer Bond - Series I (Fund 426)
Water & Sewer Bond - Series I (Fund 426) (from
South Pointe Wastewater Master Booster Pump Station)
City Center RDA TIF
South Pointe RDA TIF
Amount
$11,107,245.95
2,552,647.88
4,862,562.00
,203,063.00
15,893.71
Total Funding $19,741,412.54
CONCLUSION
At this time the conditions of some of the Pump Stations are in emergency status; the
equipment installations that FEI was providing was never completed and the Pump
Stations are still working with extremely outdated and damaged equipment installed almost
30 years ago. The City is required to act at once and proceed with the upgrades to provide
the citizens with a system comparable with the progress of the City of Miami Beach.
Therefore, the Administration recommends approval of the Widell, Inc. final negotiated bid
proposal, in the amount of $17,352,615; the award of a construction contract to Widell, Inc.
for the Water and Waste Water Pump Stations Upgrade project; awarding additional
services to CDM in an amount not to exceed $500,000 for Construction Administration and
Field Oversight services, and the requisite appropriation of funds to fully fund the project.
T:~AGENDA~2004~Jan1404~Regular~oump stations memo.doc